The probe into the Crime and Corruption Commission headed by former judge and corruption fighter Tony Fitzgerald delivered 32 recommendations to the state government on Tuesday.
They include the agency relying less on seconded police by recruiting more skilled civilian investigators.
The watchdog will also have to seek legal advice from the Director of Public Prosecutions before proceeding with charges.
The government will likely accept the recommendations in full with the report to go to cabinet on Monday, Premier Annastacia Palaszczuk says.
"No one would like to see what happened to those particular councillors happen again," she told reporters.
"There is nothing here that I cannot see our government implementing."
That includes funding for a new corruption strategy and prevention unit as part of an overarching restructure.
This would reduce reliance on seconded police and strengthen the organisation's oversight.
The report said current secondment arrangements did not provide appropriate flexibility.
"This will require the CCC to consider the skills it needs, at what time and for what purpose and engage with the QPS to ensure the composition of the group reflects those needs," it said.
Flaws in the Logan City Council matter showed a degree of 'group think' or 'pack culture' amongst police seconded to the CCC, the inquiry was told.
"The CCC lacks ... both internal and external checks and balances that appropriately addressed these risks," the report noted.
"We have concluded that seconded police officers remain a valuable asset in the CCC's work but their skills and experience do not entirely meet the requirements of the CCC's corruption investigations."
The inquiry followed claims the watchdog breached its duty to remain independent and impartial during its bungled 2019 probe into Logan Council.
The former mayor and seven councillors were charged with fraud, which lead to the council's dismissal before all prosecutions were discontinued almost two years later.
A Parliamentary Crime and Corruption Committee probe later found the watchdog failed to act "independently and impartially".
Mr Fitzgerald, who led the landmark 1989 inquiry into state government corruption that resulted in the establishment of the CCC, headed the review into the agency's role and functions.
Former judge Alan Wilson QC took charge of examining the watchdog's structure and use of police officers.
"It's thanks to the Fitzgerald Inquiry that Queensland has a permanent anti-corruption watchdog that has served us for the past 30 years, the premier said.
"It's thanks to this Commission of Inquiry that we will have an even better anti-corruption body to serve us into the future."
Former NSW ombudsman Bruce Barbour was permanently appointed to the powerful role of chairman almost six months after the departure of Alan MacSporran.